Australian tobacco executive bashed and stabbed in attempted kidnap

By Nick McKenzie, Nick Ralston, Richard Baker

The attempted kidnapping, bashing and stabbing of an international tobacco company manager outside his family home in Sydney suggests crime syndicates are hitting back at efforts to combat the booming illicit tobacco trade.

A criminal syndicate is suspected of ordering the botched kidnapping in June of a former decorated NSW policeman turned manager of British American Tobacco.

The BAT manager was stabbed and bashed by at least three men, after he refused their order that he get into a car. The kidnappers arrived at the man's Sydney home at around 10pm on Saturday June 4.

A source said the manager was forced to "fight for his life" to ward off the kidnappers, who have not been identified. He was rushed to hospital after the attack.

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Some of the 71 tonnes of illicit tobacco seized by Australian customs officials in June, 2015. Credit:Paul Bibby

The attack appears to be an unprecedented escalation in the struggle between policing agencies and the syndicates driving the illicit tobacco trade. Evidence suggests the attack was linked to BAT's support of police inquiries.

Police and big tobacco companies believe the illegal trade is driven by the escalating cost of legal cigarettes, and is now worth more than $1 billion. Budget measures mean a legal pack of cigarettes will cost $40 by 2020, compared with as little as $10 for a smuggled packet.

The bashed BAT manager had been working closely with state and federal agencies investigating the illicit trade, which is a huge source of income for organised crime syndicates in Melbourne and Sydney.

The attack has shocked law enforcement and security officials, who have compared it to the Italian mafia's violent confrontations with managers from supermarket giant Woolworths over control of the fruit trade several decades ago.

Immersed: Children bundle tobacco leaves to prepare them for curing in Sampang, East Java.Credit:HRW

The attack comes less than a year after a separate incident in which an undercover agent was threatened while working confidentially with organised crime detectives investigating tobacco smugglers.

A key concern to emerge from the attempted kidnapping is how the underworld may have learned of the BAT manager's support of transnational police investigations into tobacco trafficking.

Customs officers sort through some of the 71-tonnes of illicit tobacco they seized in June, 2015 Credit:Paul Bibby

It may have also been designed as a warning to any person supporting authorities.

The attack has led some organised crime investigators to question why NSW Chief Commissioner Andrew Scipione, who has been briefed on the attack, agreed in May to shut down the Polaris waterfront crime taskforce, which was investigating several leading illicit tobacco importers in NSW.

The federal government's response to the spike in the illicit tobacco trade has been a modest $7.7 million funding boost for the small but successful Australian Border Force Tobacco Strike Teams, which have been operating for a year.

The teams, devised by Australian Border Force chief Roman Quaedvlieg, have already intercepted tens of millions of dollars worth of tobacco smuggled in shipping containers into Sydney and Melbourne from the Middle East and Asia.

The teams have also mapped strong links between the illicit tobacco trade and notorious organised crime families in Melbourne and Sydney - families that are also allegedly involved in drug trafficking and violence.

It is possible the success of the strike teams, or the work of Taskforce Polaris, encouraged the attack on the BAT manager.

Organised crime investigators in NSW and Victoria have been warning for months that the illicit tobacco trade is booming.

One NSW based tobacco smuggling syndicate has used its profits to fund cocaine importations and is also linked to fundraising for a Lebanese community organisation loosely aligned with the militant Lebanese group Hezbollah.

Organised crime groups traditionally involved in drug importations have embraced the illicit tobacco market due to the less serious penalties for those caught importing and the huge profits available.

Increases in tobacco excise, which is set to rise again this year and are backed by both major parties due to public health and revenue raising benefits, has been a boon for the illicit trade.

Despite successful law enforcement efforts, illicit tobacco is sold freely and openly across Australia, suggesting huge quantities of the untaxed product is being continuously and successfully smuggled into Australia.

Health advocates have accused the tobacco industry of overstating the size of Australia's illicit tobacco market and the involvement of organised crime as part of a strategy by 'big tobacco' to combat anti-tobacco initiatives that erode the profits of cigarette companies.

Nick McKenzie is a leading investigative journalist. He's won Australia's top journalism award, the Walkley, seven times and covers politics, business, foreign affairs and defence, human rights issues, the criminal justice system and social affairs.

Richard Baker is one of Australia's most experienced and decorated investigative journalists, with 12 years in The Age newspaper's investigative unit. He has many times been the recipient of Australia's major journalism awards, including multiple Walkleys, the Melbourne Press Club's gold quill and more than a dozen other quills, a Kennedy award and the George Munster prize for independent journalism. Together with colleague Nick McKenzie, Richard has broken major international and national corruption scandals. He also writes regularly on politics, business, crime, sports affairs, defence and intelligence and social affairs. In 2016, he created and co-hosted the awarding winning six part podcast series, Phoebe's Fall.